The Rise of the Hybrid Retail Model – a New Dawn for South African Shoppers – Mobicred

The pandemic years catalysed a shift in the local retail sector, driven by the dramatically accelerated pace of digitisation. In the wake of COVID-19, greater adoption of online shopping was limited only by the fact that South Africa remains a predominantly cash-based economy. But, with the launch of the ‘cash-like’ payment system, Payshap, this picture is about to change, ushering in a new era for omnichannel retail in South Africa.

Commenting on these recent developments is Jason Sive, CEO of digital credit leader Mobicred, which forms part of the leading retail credit group RCS. As he explains: “Claims that brick-and-mortar retail would be rendered all but obsolete by the shift to digital, during the pandemic, were premature. Instead, a new, hybrid model for the sector is taking shape. Physical stores will always have a place in the retail industry of the future, but their operations will be supported and enhanced by digital technology.”

Providing evidence for his standpoint, Sive says that: “Recent reports have revealed that footfall volumes in shopping malls across the country are almost back to pre-pandemic levels. But it must be noted that many retailers who had previously only dipped their toe in digital waters have now taken the plunge, bolstering their operations with e-commerce platforms and mobile apps.”

Digital breathes new life into the customer experience

A prime example of how omni-channel retail is gaining traction on the local market is Game’s recent launch of its’ myVirtual Credit offering. This virtual card option will allow Game customers to make purchases via its online store without having to go in store or pay using a plastic store card.

With this decision, Game will make credit more accessible, expanding its reach into younger, more digitally savvy markets. The virtual card will work in tandem with its existing, physical store card, giving customers more choice in terms of how they shop and how they choose to pay. Developments such as these reflect an evolving consumer landscape where choice and convenience have become the most important selling points.

Similarly, Hirsch’s, the growing independent furniture and appliance retailer, who previously only enabled Mobicred for online purchases, recently went live with Mobicred in all of their stores nationwide. Customer adoption was immediate even before the option was widely communicated. This is proof of growing customer comfort with the technology and the demand for more flexible options when shopping across store and online channels.

As Sive explains: “Investing in technology that will enable improved user experiences across multiple channels will become the biggest bargaining chip for local retailers. By joining forces, RCS, a leader in tradition store led credit, and Mobicred, the first service to offer digital credit in SA, are able to meet an increasing appetite for online and mobile commerce across the retail sector.”

Greater accessibility – a step in the right direction

Previously, the cost of online shopping, in the form of payment processing and delivery fees, served as an obstacle for growth in the retail sector. But with the recent launch of Payshap, as cash’s greatest rival, the barriers to entry which prevented South Africans from shopping online, will fall away.

Although South Africa’s traditional banks offer varied processing rates on Payshap transactions, the cost of using digital payment technology has been significantly lowered. Furthermore, technology of this kind answers the biggest pain point that has previously deterred South Africans from transacting digitally – speed. With Payshap providing an instant payment service, transacting digitally now equates to cash in hand.

“The most significant contribution that services of this nature will make to the retail environment,” says Sive, “is the democratisation of digital payments. For years, RCS has worked towards greater accessibility in the local financial services arena.”

RCS’ commitment to this aim drove strategic investments like its partnership with Mobicred in bringing flexible repayment options to online shoppers.

These developments, in tandem with retailers’ investment into innovation in the payments space is evidence of a growing trend towards greater financial inclusion. For Sive, this is an objective that is not only vital to the growth of the local retail industry but an aim that resonates with the pressing need for more South Africans to become financially active members of society.

Omni-channel retail in the ‘new and improved’ normal

With brick-and-mortar regaining its foothold in the market, powered by digital innovation, the sector is showing positive signs of recovery.

And, as Sive concludes: “This is only the beginning. The global shift in retail towards hybrid shopping experiences has found its legs in the South African market, offering customers innovative shopping solutions. Going forward, the greater adoption of technology will bring about a ‘new and improved normal’ for the retail sector as a whole.”

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